India

India

MINISTER SEEKS MORE CONTROL

1 October 1995

New government guidelines regarding "proper utilisation" of fiscal market incentives are worrying wind developers. They fear the market will be braked. The guidelines demand detailed project reports from developers, covering siting, selection of equipment, capital cost, cost of generation, performance and so on.

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To the consternation of much of the wind industry in India, the Ministry of Non Conventional Energy Sources (MNES) has issued guidelines to ensure that its market stimulation incentives for wind energy development are "properly utilised." There are now fears among project developers and wind turbine manufacturers that the guidelines could severely brake the rate of new wind installations.

The guidelines have been sent to the country's State Electricity Boards (SEBs), local agencies, state governments, and wind turbine manufacturers and developers. Developers will now need to submit a detailed project report covering all aspects of siting, selection of equipment, capital cost, cost of generation, performance and so on. These are to be reviewed by the relevant SEB or local government agency, although technical committees with representatives from MNES may be constituted to ensure the process does not bog down in paperwork.

Included in the guidelines are instructions on siting. Wind installations should only be permitted in areas where wind measurements have been undertaken, preferably for three to five years, but for no less than one year.

For the first time, too, accredited certification will be required for wind turbines made in India, to be carried out by a wind turbine testing centre being set up in Madras with backing from Denmark. Foreign turbines, too, must be certified, either by a recognised classification society or by their own national test centres. For wind turbine parts being exported for assembly by Indian partners, the supplier must also provide approval documentation.

Once it is built, the developer of a wind farm must submit monthly performance reports to the SEB and MNES and maintain the project for three years. The SEB and MNES will be responsible for ensuring these obligations are adhered to.

Although fearing the effect of the guidelines, foreign suppliers to the market generally agree that checks are needed to prevent speculators cashing in on the huge tax credits available with poorly executed projects they have no intention of maintaining. Already India is awash with stories of projects only half built, projects built without grid connection, and turbines with major construction faults.

"Of the 25 manufacturers established in India, we haven't heard of half of them. It's a sign something is unbalanced" says a veteran of the wind scene, Hans Buus of Danish Nordtank. "Hopefully some bad examples of the technology will not affect the industry too much."